Health Insurance Premiums in Washington Set for Increase

In Washington, health insurance premiums are anticipated to rise significantly next year.

Insurance Commissioner Patty Kuder shared details at Spokane’s City Hall, indicating that both Affordable Care Act exchanges and employer-provided insurance plans will become pricier.

Those enrolled in the exchange could see an average increase of 21% in insurance rates for 2026. The state’s insurance commissioner’s office projected that premiums for employer-sponsored plans using the exchange would jump between 6.5% and 10%.

Kuder emphasized that individuals relying on the exchange often represent some of the state’s most vulnerable groups. “Low-income families will struggle to manage these hikes. There’s a real worry that they might withdraw from the health system entirely,” she noted.

If that happens, it could result in a situation where those needing coverage most become sicker, leading to even more healthcare usage and costs.

Since 2011, residents of Washington have been able to purchase health insurance via exchanges if their employers don’t offer plans. In 2024, almost 300,000 individuals acquired individual health plans through these exchanges, with around 20,000 in eastern Washington. Typically, those shopping in the exchange are self-employed, early retirees, or are without employer coverage.

While many still opt for employer-sponsored insurance, these premiums are also likely to rise. A Mercer national survey suggests a 6.5% increase for employer-supported plans, marking the steepest rise in 15 years.

Mercer reported that these premiums have risen about 3% over the last four years, largely due to escalating drug prices and costs of various health services. Other national surveys echoed these findings, with the Health Business Group estimating an average premium increase of 7.6%, and another foundation forecasting a 10% rise.

The requested 21% increase in exchange premiums, determined by insurance companies, was subsequently approved by the state insurance commissioner based on shifts in costs. If the request was accurately assessed, the fee hike becomes necessary to align with the actual cost changes.

Insurance premiums represent standard expenses that providers charge based on the risk of potential claims. As healthcare costs rise, monthly premiums inevitably increase, affecting individuals’ financial planning.

Over the past five years, the percentage increase has steadily climbed, from 4.2% in 2022 to 10.7% in 2025. The anticipated 21% jump for 2026 is nearly double the previous year’s increase, influenced mainly by rising healthcare and prescription drug costs, Kuder highlighted.

“Healthcare expenses have surged overall, driven by increased demand for services,” she explained.

Another element contributing to these hikes is the expiration of the premium tax credit that eased monthly premiums during the Covid-19 pandemic. This tax credit reduced annual costs by about $1,330. It’s estimated that around 80,000 residents in Washington may lose their coverage if this credit isn’t renewed.

“We’re uncertain about the future. The timing of these changes, and how quickly they occur, also contribute to the rising rates,” Kuder added.

If the premium tax credit is extended, the Insurance Commission estimates the 21% increase might be reduced by 4-6%.

Analysis from the Kaiser Family Foundation suggests that individuals utilizing exchange insurance could see premium increases of up to 75% if the tax credit expires.

“These two increases are intertwined; without subsidies, a surge in monthly payments exceeding 75% could prompt enrollees to drop their individual market coverage,” Kuder noted.

During the discussion at City Hall, Rep. Timm Ormsby remarked on the significant challenge facing the state in addressing potential losses from federal tax credits.

Sen. Maria Cantwell has urged the Republican-controlled Congress to extend these tax credits into the next year.

“Residents are discovering they may need to pay an average of $129 next year, or $1,548 for the same coverage they currently have. These price hikes largely stem from the decision not to renew enhanced premium tax credits as part of the Affordable Care Act,” she stated.